Rising Asia Wages May Boost Sub-Saharan Manufacturing, IMF Says

Oct. 12 (Bloomberg) -- Sub-Saharan Africa’s low-cost labor
and young population give the region growing potential to
compete better with Asia as a manufacturing hub and ease
poverty, the International Monetary Fund said.

“The challenge for sub-Saharan Africa will be to take full
advantage of these developments, which will require investments
in both human and physical capital,” the Washington-based
lender said in a report released in Tokyo today. “The aim is
clear: to harness Africa’s resources to provide high and
sustained growth, raise living standards, and create employment
opportunities.”

The economy of sub-Saharan Africa, the world’s poorest
region, will grow 5.7 percent in 2013, the fastest pace after
developing nations in Asia, the IMF said in an Oct. 9 report.

The fund said today that because the share of employment in
agriculture is high in most sub-Saharan Africa economies and
productivity levels are low, there’s an opportunity to raise
living standards through productivity improvements.

“If there is to be significant structural transformation
in sub-Saharan Africa, the employment share of agriculture will
almost certainly decline,” the IMF said. “The challenge here
is to raise education standards and narrow the infrastructure
gap to levels at which the region can compete for higher value-added services.”